As Latinos grow in Grand Rapids, financial program boosts their businesses

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GRAND RAPIDS—Midafternoon is quiet at the Ebenezer bakery and restaurant, a time when the handful of tables are empty and co-owner Blaymiro Rodas can take off his apron after making burritos and quesadillas for his lunch customers.

Taking a seat near the front window, next to a mural of a tree hung with photos of his native Guatemala, Rodas recently looked through a contract that he hopes will help transform his 11-year business.

An accountant sat across from him, ready to answer his questions about what it would mean for Rodas to sign on with a new program offered by the West Michigan Hispanic Chamber of Commerce to improve his knowledge of business finances.

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The bakery’s potential is obvious to Guillermo Cisneros, president of the chamber. The business occupies two small storefronts on South Division, about a 17-minute bus ride from downtown Grand Rapids. A high counter where restaurant customers place their meal orders lines the back of one storefront, while cabinets filled with fresh pastries like Guatemalan sheca, shelves of groceries and a counter for a money wiring service fill the other.

“You see all of these businesses together,” Cisneros said, gesturing around the shared doorway. Each could expand, he said, even with the limited nearby parking.

Rodas agreed there is room to grow, even if it ends up at a different location. Signing up for the new chamber program is his first step toward making plans for it. 

“I see my business in a different area and bigger,” he told Cisneros in Spanish.

Yet expansion may not come easily, based on national data that showed Latino-owned businesses tend to have less access to capital and other financial advantages, which was true well before the pandemic.

To combat that, Cisneros said the chamber began the program to prioritize financial literacy — representing everything from record-keeping and credit history to accounting — as the key to bringing more resources to a growing number of establishments owned by a native-Spanish-speaking population. 

Hispanics and Latinos now make up 11.4 percent of Kent County’s population, up from 9.7 percent a decade earlier. But household income is only about two-thirds of the county’s average.

Latino businesses are growing with the population, with the majority run by former blue-collar workers who came out of manufacturing, hospitality or agriculture industries, Cisneros said, where they may not have needed or learned basic business skills. Some may never have finished elementary school in their home counties, and can be so focused on working in their businesses that they don’t step back to manage them.

“They’re very hard-working people,” Cisneros said. “That’s in their blood…. But they don’t have the business management knowledge to run their businesses properly.”

The chamber’s accounting initiative will help to change that, Cisneros said. 

That’s why he brought an accountant with him that day to sit down with the bakery owner. The woman, Jennifer Rivas, is a refugee from Colombia who worked with small businesses there before leaving with her family. 

Ebenezer and other Latino-owned businesses in the program will be able to pay less than market rate for the services, thanks to funding from a $375,000 grant awarded to the chamber by the W.K. Kellogg Foundation (Disclosure: Kellogg is a funder of Bridge Michigan and its nonprofit parent organization, The Center For Michigan.)

Examples of the financial education business receive go beyond accounting and spreadsheets: It might mean helping an owner create invoices, compare prices for supplies or market their products and services.

The goal, according to the grant, is to “increase the growth of Hispanic- and Latinx-owned businesses in the Grand Rapids area by providing financial capability technical assistance.”

Accomplishing that will help overcome years of inequities. 

Before the pandemic, the U.S. Small Business Administration said, Latino-owned businesses were the fastest growing segment of small businesses in the country.  Yet, the odds of loan approval from national banks were 60 percent lower for Latinos, according to a study released in early 2020 by the Stanford Graduate School of Business.

The first months of the pandemic wrought other disparities: About 32 percent of the nation’s Latino-owned small businesses closed between February and April 2020, compared to 17 percent of white-owned small businesses, the SBA said. When Stanford University researchers updated their report in August 2020, they  found “Latinos have fewer resources to weather the ongoing storm.”

These businesses had less cash on hand and were approved for Paycheck Protection Program loans at half the rate of white-owned businesses, the report said. 

This past February, the incoming Biden administration changed guidelines for PPP  loans, which sent $525 billion to small businesses across the country and allowed some loans to convert to grants if businesses applied the funds to keep workers on the payroll and cover other expenses.  Some of the changes were expected to help Latino businesses, including a two-week application window for employers with 20 or fewer workers, and the ability for non-citizens to apply.

However, despite SBA efforts to boost funding to underserved businesses, many Latino businesses in West Michigan still struggle to realize their profit potential, Cisneros said. 

“I don’t think the Anglo community sees Latino businesses as successful businesses,” Cisneros said. “That’s what I'm trying to change. We have an incredible opportunity to change that narrative.”

He cited successful Latino groceries as community success stories, and some restaurants that are finding ways to promote their food beyond their Latino base. 

Yet in this area of Grand Rapids, known as the Burton Heights Business District, restaurants with hand-lettered signs, hair salons and a Family Dollar are surrounded by empty storefronts, with more commercial vacancies on a single block than the celebrated downtown district a few miles to the north.

As he gets to know the business owners on Burton, Division, Grandville and other streets with taqueria and mercado signs in windows, Cisneros said he comes across owners of 10- to 15-year-old businesses that aren’t growing, limiting their value and making it harder to sell or turn them over to their children.

Other businesses stay open for just a few years before closing, due to lack of management and capital.

“So there is no creation of wealth … that can pass to the next generation,” Cisneros said. 

The chamber has a budget of $1.2 million, which Cisneros said represents a six-fold increase since he took over in 2017. Its office is across Division Street from Ebenezer bakery. 

Cisneros said the chamber had an opportunity to open in downtown Grand Rapids, but chose the second-floor loft for a purpose.

“We wanted to come to the neighborhood to show … the reality of our community,” he said, describing it as a near-equal mix of Black, Latino and white residents.

“We want to make sure the investment comes to the neighborhood, and gets out of downtown a little bit.”

The chamber’s work unfolds as other business and community groups in the region focus on inclusion and equity issues. Regional economic developers at The Right Place, for example, joined with the Brookings Institution in February to explore barriers to building an inclusive economy.  

The City of Grand Rapids incorporates equity in its economic development strategies, said Jeremiah Gracia, economic development director for the city.

The city has supported the Hispanic Chamber along with business groups like the Grand Rapids Area Black Businesses and West Michigan Asian American Association, Gracia said. It also supports six areas outside of downtown where improvements are funded through Corridor Improvement Authority property tax captures, including one that covers the South Division and Grandville Avenue business areas.

“It is vitally important that we continue to make investments in these neighborhoods,” Gracia said. “... Many have a strong minority-owned business presence.”

Other businesses considering the Hispanic chamber’s accounting initiative include a building contractor and some beauty salons. Cisneros said he is hopeful the list will grow.

Creating financial structures “will open doors to them, for everything — for loans, for expansion,” Cisneros said.

“We all can be successful if we are willing to work for better.”